Foreign Relations of the United States, 1952–1954, China and Japan, Volume XIV, Part 1

S/S–NSC files, lot 63 D 351, NSC 152 Series

No. 107
Memorandum by the Assistant Secretary of State for Far Eastern Affairs (Robertson) to the Secretary of State

secret

[Washington,] June 2, 1953.

Subject:

• Review of Economic Defense Policy: NSC-152¹

Problem:

Position for NSC discussion on economic defense policy.

Discussion:

We find ourselves unable to agree with the memorandum from E on NSC-152.²

We view the Communist China situation as different from that obtaining in Europe. There is historic dependence by Western Europe upon Eastern Europe. There is no shooting war in Europe at the moment. The Soviet threat in Europe, though great and dangerous, is not as active as the Chinese Communist menace to Asia.

The interdepartmental study,³ in which FE did not participate, poses alternatives including:

(1) The maintenance of present policies. We doubt that the statement of present policies toward trade with Communist China is accurate. We have worked toward the goal of elimination of trade by all nations with the Chinese Communists, limited only by a decent respect for the difficult internal and international political situation of our allies.

(2) The abandonment of the entire trade control program. We believe the trade control program has accomplished something. It represents substantially our only present non-military leverage against the Chinese Communists which they seem to understand and fear.

(3) The intensification of the scope and force of the program. We recommend that this alternative be fully explored.

(4) The establishment of the program on a narrower base. As far as Communist China is concerned, this proposal envisages simply a softer U.S. policy toward exports.

The “net advantage theory” appears to us to have little relevance for Communist China in the foreseeable future. Items are not now carefully screened by other countries for their balance of advantage value.

Commodities other than the most highly strategic have been added by other countries to their control lists largely because of direct persuasion and negotiations in multilateral forums carried on through U.S. Government initiative.

Recommendation:

We recommend that insofar as Communist China is concerned, you take the position that the Planning Board should make an urgent study and recommendations on the intensification of the scope and force of the economic defense program (alternative No. 3).⁴

1. NSC 152, “Review of Economic Defense Policy,” May 25, 1953, was a report to the National Security Council by the NSC Planning Board, setting forth four alternative choices of policy as summarized in this memorandum. (S/S–NSC files, lot 63 D 351, NSC 152 Series) For the major documentation on the NSC 152 Series, see vol. i, Part 2, pp. 968 ff.; see also Document 131.
2. This memorandum has not been found in Department of State files, but a June 3 memorandum from John M. Leddy, Acting Deputy Assistant Secretary of State for Economic Affairs, to the Secretary reported that only minor intensification or relaxation of the existing system of controls was practical or appropriate. (S/S–NSC files, lot 63 D 351, NSC 152 Series)
3. NSC 152.
4. The National Security Council discussed NSC 152 on June 4 and, in NSC Action No. 806-b, “directed the NSC Planning Board to study and prepare recommendations, including timing, for Council consideration along the following lines of policy: (1) Maintain present policy regarding Communist China and Korea. (2) Move toward Alternative 4 in NSC 152 regarding other Soviet bloc countries.” (S/S–NSC (Miscellaneous) files, lot 65 D 95, “Record of Actions by the National Security Council, 1953”)